Here’s How You Can Divide Your Assets Fairly
If you are going through a divorce or separation, the issue of property settlement is likely to arise. This is in fact the major legal issue most separating couples need to deal with and resolve following a separation. There needs to be an adjustment and division of their property and liabilities.
What are the most important things to keep in mind in respect of property settlement?
The separating couple needs to come to their own agreement about property settlement. It is usually best to try to bring about this agreement quickly. Things do not usually become easier or better as time passes. There are time limits to conclude property settlement. They are one year from divorce, for married couples, and two years from separation for de facto couples. After that, your rights may be comprised and you may lose the right to seek a property settlement. But is better not to wait in any case.
You want to try to avoid court proceedings if at all possible. The Federal Circuit and Family Court of Australia is there to assist you if you need it. It is an excellent resource. But court proceedings are long, expensive and draining. It is far better and more satisfying to come to your own agreement.
Once you do, it is important to document your agreement. This can be done by filing documents including the agreement on the court portal and obtaining Consent Orders. The agreement is ratified by a court Registrar and become a final and binding agreement. The courts will assist you to enforce it if necessary. You can alternatively enter into a private Binding Financial Agreement, signed before independent lawyers. But Consent Orders are the preferred way of concluding most property settlements.
It is extremely difficult to do this on your own.
It is one of the most important decisions you will make and a lot of things can go wrong. It is usually far better, quicker and cheaper to obtain the advice and assistance of an experienced family lawyer. He or she can help you understand your legal entitlements and the processes of reaching a successful resolution.
But it is vital to choose the right legal assistance. Someone who is willing to work with you cooperatively and assist and empower you to come to your own agreement if possible and not take total control. Someone dedicated to assisting you to a successful resolution and doing it as quickly, effectively and as inexpensively as possible.
There is a basic four steps process in the property settlement procedure. This is the process which would be followed if the matter were in court, or in mediation. It is the process you should follow yourself when trying to agree to a property settlement.
Determine the balance sheet, being all your assets, liabilities, superannuation entitlements and financial resources, as they currently exist, which constitutes your asset pool and put this down in writing.
Consider the various contributions you each have made to this asset pool. The contributions are both financial ones, made by each of you; being firstly your initial contributions of assets you owned at the beginning; your financial contributions made during the relationship and after separation. This contribution is from wages and earnings, and also contributions made on your behalf, such as gifts, inheritances, redundancy and compensation. Then there are the non-financial contributions made by the parties to the asset pool, such as made by doing renovations or setting up businesses. And finally, the contributions made by the parties as homemakers and parents. These contributions are then assessed wholistically in percentage terms (eg 60:40, 50:50)
Determine any adjustment to this percentage division, due to future financial needs of the parties. Such things as a disparity in earnings and earning capacity are considered, as well as the arrangements for the care of children and whether one party is acting as the primary carer for the children. (eg, based on the wife’s future financial needs, there may be an adjustment back to her of 10 to 15%)
Then consider this percentage adjustment of the asset pool and apply it to the division of the whole asset pool between the parties, in order to do justice and equity to between them. It needs to be determined whether real estate be sold and divided by percentage shares, or whether one party purchases the other’s interest in a home and refinances the mortgage. Similarly the rest of the asset pool is divided in a similar way. Consideration can be given to Financial resources such as the right to compensation or an overseas pension and a party can be allocated an extra share of existing property in view of the entitlements of the other party to retain a financial resource.
Superannuation can be dealt with in a variety of ways.
The parties may agree to keep their superannuation as part of their share of property. Alternatively, there can be a splitting order. This is an order by which part of one party’s superannuation is split off from their account and rolled over to the other party’s superannuation account. This can only be done pursuant to a family law settlement.
There can be a myriad of issues and considerations to take into account in assessing the contributions of the parties and their future needs and coming to a fair property settlement.
The best way to resolve a property settlement following a separation, is to adopt a sensible and practical dispute resolution process. Hopefully, the parties make a commitment that they will try to resolve the matter themselves and keep the dispute out of court if at all possible. They should obtain good legal advice and assistance from experienced family lawyers, who are dedicated to assisting their clients obtain the best possible result as quickly, effectively and inexpensively as possible.
There are usually three Phases of a good dispute resolution process. There is the Preparation Phase. Then the Engagement Phase. Finally, there is the Resolution Phase. There is also usually 9 Steps towards reaching a good resolution.
We have set this out in our free Ebook, “Lawfully Uncoupling - 9 Steps to a Successful Separation”.
If you follow the principles and practices as specified in the Smart Separation framework, your prospects of coming to your own successful resolution are excellent. In the unusual situation that it doesn’t work despite your best efforts, then you may be obliged to issue Court Proceedings or seek to arrange Arbitration which is a private court hearing to determine property settlement issues. You will be well prepared to do so, having participated in the Smart Separation System.
Interested to know if Modern Divorce Solutions is right for you?
Or need some more information around property settlement,
We would be delighted to help you.
